The ratio of sales to invested assets,which is also a factor in the DuPont formula for determing the rate of return on investment,is called
A) profit margin
B) indirect margin
C) investment turnover
D) cost ratio

Question

Quizplus · Accepted Answer

The ratio of sales to invested assets is called investment turnover. This measures how efficiently a company is using its assets to generate sales. It is a key component in determining the rate of return on investment in the DuPont formula. Profit margin measures the amount of profit generated per dollar of sales, indirect margin is not a financial term, and cost ratio does not accurately describe this ratio.

The Ratio of Sales to Invested Assets,which Is Also a Factor